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Fed Chair Powell: 'The Law Is Clear' Trump Can't Replace Him

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Fed Chair Powell: 'The Law Is Clear' Trump Can't Replace Him

Two days after a surprisingly weak U.S. jobs report rattled investors Friday, an in-depth interview with Federal Reserve Chair Jerome Powell aired on “60 Minutes” Sunday.

Powell spoke about the Fed’s approach to interest rates in coming months, the health of the U.S. economy and whether President Donald Trump’s frequent criticism of Powell will ultimately lead to his replacement. 

Interest Rates

When asked about the Fed’s interest rate decisions in 2019, Powell said the latest economic data indicates it would be prudent for the Fed to be patient.

“Patient means that we don't feel any hurry to change our interest rate policy. What — what's happened in the last 90 or so days is that we've seen increasing evidence of the global economy slowing down, although our own economy has continued to perform well,” he said. 

Powell said the U.S. economy is generally strong, with low unemployment, strong GDP growth and rising wages.

“Consumer confidence is high, business confidence is high. We've seen a bit of a slowing, but I would say the principal risks to our economy now seem to be coming from slower growth in China and Europe and also risk events such as Brexit." 

Powell said he sees little risk of an imminent U.S. recession but expects economic growth to slow in 2019.

Trump’s Attacks

Trump has repeatedly lashed out at Powell and the Federal Reserve, blaming them for hurting the economy by raising interest rates. Following the last rate hike in December, Trump said Powell was “making a mistake” and that the “Fed has gone crazy.”

Powell said he wouldn’t comment on Trump directly. Despite the criticism, he said he believes his job is safe.

“Well, the law is clear that I have a four-year term. And I fully intend to serve it,” Powell said when asked if Trump could fire him.

Optimistic Outlook

After roughly a decade of economic expansion, Powell said there’s no reason to believe the party is ending.

“Eventually, expansions come to an end. The business cycle has not been repealed. But I would say there's no reason why this economy cannot continue to expand,” he said.

Investors certainly haven’t been concerned about the economy so far in 2019. The SPDR S&P 500 ETF Trust (NYSE: SPY) is up 10.2 percent year-to-date.

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Screenshot courtesy of "60 Minutes." 

Posted-In: 60 minutes Jerome PowellPolitics Federal Reserve Media General Best of Benzinga

 

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